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IB economics: Macro-economic definitions and theory SL Flashcards | StudBud
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IB economics: Macro-economic definitions and theory SL
IB economics: Macro-economic definitions and theory SL
30 terms
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Macr-economics
Flashcards
30 cards
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Practice quiz
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Host live
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Questions
30
Answers
1
Which of the following is
NOT
a macro-economic objective?
low inflation/price stability
economic growth
equitable distribution of income
low unemployment
2
Unemployment in Keynesian theory is...
demand-defficient
all voluntary
because of free riders living off social security
long run unemployment
3
Quantitative easing is when...
the government subsidises environmental goods
firms lay off labour, creating unemployment
households pay off their debts
the ECB buys long term debt from banks
4
Which of the following policies can create a recession?
Supply-side policy
Expansionary monetary policy
Expansionary fiscal policy
Contractionary monetary policy
5
Structural unemployment is when someone has...
given up looking for employment
left the macro-economy to work elsewhere
given up one job and not found another
skills is no longer needed in the labour market
6
The long run in the new classical theory is...
when there is no growth in the macro-economy
when all firms are making abnormal profit
when the central bank has the money supply in equilibrium
when there is equilibrium in the labour market
7
Which of the following policies
always
widens income distribution?
Monetary policy
Fiscal policy
Market-based supply-side policy
Interventionist supply-side policy
8
Market-based supply-side policies may include...
educating the retraining labour
reducing minimum wages and unemployment benefits
subsidising public goods
managing the exchange rate
9
Which of the following is
NOT
counted as unemployed when unemployment is measured?
Cyclical (demand-deficient) unemployment
Frictional unemployment
Hidden (disguised) unemployment
Structural unemployment
10
Structural unemployment can be reduced by...
exchange rate policy
fiscal policy
monetary policy
interventionist supply-side policy
11
The ECB's main responsibility is...
to finance government debt
to print enough Euros to make people happy
to provide enough Euros for everyone
to maintain the value of the Euro
12
In Keynes theory, the long run is when...
we are all dead
the AS is vertical
the average is calculated over a long period
there is equilibrium in the labour market
13
The distribution of income may be measured by...
the number living in poverty
the circular flow of income
the free market
the Lorenz Curve
14
Economic growth is...
an increase in the quantity of money in circulation
an improvement in the general quality of life
an increase in real GDP over a period of time
an increase in nominal GDP over a period of time
15
The new classical theory is...
a load of rubbish based on impossible assumptions
based on the belief that money has value
a right wing conspiracy
a brilliant reflection of reality (like Plato's cave)
16
Transfer payments are...
proportional taxation
social security payments to the poor
subsidies to firms
income sent home from abroad
17
A government budget deficit occurs when...
the government reduces taxation
the government increases spending
government spending is greater than tax revenues
tax revenues are more than government spending
18
Which of the following is
NOT
a component of aggregate demand?
Net exports
Taxation
Investment
Consumption
19
Deflation is a major problem because...
reduces the value of savings
it forces the central bank to print money
it creates cyclical unemployment
it depreciates the exchange rate
20
Fiscal policy can be when...
income tax is reduced
minimum wages are reduced
the money supply is reduced
interest rates are reduced
21
Demand-pull inflation can be a result of...
increasing wages
increased taxation
increasing the money supply
reductions in government spending
22
Which of the following is an injection into the circular flow of income?
Household spending on goods and services
Imports
Government spending
Payments of profits
23
The Keynesian AS has a vertical section because...
there is full-employment in the macro-economy
in the long run we are all dead
fiscal policy doesn't work in the long run
monetary policy increases the price level in the long run
24
The new classical SRAS (Short Run Aggregate Supply) slopes upwards because...
changes in the money supply
wages are assumed constant in the short run
of bottlenecks
depreciation in the currency
25
GDP/capita per annum (US$ at PPP) in Finland is...
about $50 000
about $75 000
about $25 000
about $10 000
26
The real economy of the circular flow of income includes the flow of...
payment for goods and services by households to firms
labour from households to firms
taxation out of the circular flow
currency in and out of the macro-economy
27
Fiscal policy is...
the central bank controlling the money supply
the banks' manipulation of interest rates
the control of the exchange rate
the government policy of taxation and spending
28
The business cycle measures the...
fluctuations of AD about the long run growth trend
variation in business profits in the long run
circular flow of income
inevitable recessions that occur every five years
29
Which of the following policies
CAN'T
be used to reduce inflation (in the short run)
Tax policy
Fiscal policy
Supply-side policy
Monetary policy
30
Sustainable growth is increasing GDP that...
reduces extreme and relative poverty
avoids any recessions
leaves future generations equally well off
is like in Finland rather than China
